Unite the Union started legal action against the St John Emergency Ambulance Service last year in a bid to restore the £7m. deficit in the service’s final salary pension scheme, which was closed in 2015.
However, that has been ‘put on hold’ after members accepted an offer from St John that will see the employer pay into a new defined contribution scheme.
‘It is still nothing like as good as they have now – they have still lost the final salary pension scheme – but the most useful thing is that the employer is going to be contributing into it,’ said Unite’s regional officer Bob Lanning.
‘Although it is a defined contribution scheme, what made it more attractive was that an increased sum of money will be transferred into it.
‘It at least gives each member a foothold.’
Mr Lanning admitted that keeping the final salary pension scheme ‘was never going to happen’ and attempting to force that through might have led to the dissolution of St John.
‘The only means of doing so would be to go through a legal challenge, have a judge rule that [a final salary scheme] was a contractual benefit and find someone with the money to put it back in place,’ he said.
‘What it would most likely have meant would have been that St John no longer existed, and the membership did not want that to happen.
‘The most important aspect is that the membership was given an offer that wasn’t on the table before.
‘Although it will never deliver the premise of a final salary scheme, it is helpful and delivers a useful pension in retirement.’
Unite was criticised by St John trustees for pursuing the matter through the courts, saying last year that the claim was ‘distracting management time and money’ when the union knew that the employer’s options ‘were severely limited by its financial position’.
‘Looking forwards we have a far better relationship now with St John, but it took a legal challenge to get them around the table,’ said Mr Lanning yesterday.
‘If ever there was an issue in the future I believe we will go through a better process.
‘There is a far better management structure in place and we have a far better working relationship.’
He said the legal challenge had been put on hold and they had needed to satisfy the courts of the reasons they were willing to withdraw the legal challenge.
‘It’s just a question of how we sign this off,’ he said. ‘We have lawyers thrashing out the details.’
St John chief officer Ali Marquis said in March that they were close to striking an agreement ‘following lengthy discussions with Unite the Union and our employees’.
More than 20 people are set to be affected. Under the original offer from St John, employees were set to receive only 26% of what they claimed St John was obliged to pay.
The final salary scheme was established in January 1975, and the plaintiffs’ contracts of employment obliged them to join it when they began working for St John.
They each contributed 6% of their salary and the broad objective of the scheme was to provide a retirement pension of 1/60th of their final pensionable salary for each year worked.
The scheme closed on 28 February 2015, and the amount being claimed was equal to its estimated deficit as of 1 January 2013.
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